Royalty on mineral use is treated as taxable services under reverse charge, with mandatory registration for liable businesses. Royalty paid by business entities to the government for the use of natural resources is treated as supply of services under GST and is taxable at 18% under the reverse charge mechanism. The recipient business entity is responsible for payment of tax on the royalty amount, and registration is mandatory where tax is payable on this basis, irrespective of the normal threshold limit. Even if royalty has not been paid in accordance with the rules, tax liability remains attracted on the royalty amount legally payable.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Royalty on mineral use is treated as taxable services under reverse charge, with mandatory registration for liable businesses.
Royalty paid by business entities to the government for the use of natural resources is treated as supply of services under GST and is taxable at 18% under the reverse charge mechanism. The recipient business entity is responsible for payment of tax on the royalty amount, and registration is mandatory where tax is payable on this basis, irrespective of the normal threshold limit. Even if royalty has not been paid in accordance with the rules, tax liability remains attracted on the royalty amount legally payable.
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